Santiment has published a chart showing how bitcoin’s Token Age Consumed metric spiked yesterday just before the price increase.
Our Sanbase Pro platform detected a very large 'Token Age Consumed' spike for $BTC about 75 minutes before the price began to rise. For those who aren't familiar with what this metric measures, it shows the amount of tokens changing addresses on a certain date, multiplied by the pic.twitter.com/Pli8rzYYbG
— Santiment (@santimentfeed) April 1, 2020
In fact, about 75 minutes before the rise began, which took the price of BTC from about $6,200 to over $6,700, there was a huge spike in the value of this parameter.
This is a somewhat complex parameter, which measures the amount of tokens that have been moved from one public address to another in a given time period multiplied by the number of days since their last movement.
It is a useful metric for understanding the direction the price might take and in particular the significant variations in case of strong changes.
Santiment adds nothing else, but it does suggest that this huge movement of long-held tokens in such a short period of time could suggest a strong price movement in the short term.
Looking at the historical values of this parameter, it seems that even in the past when such spikes occurred, in the following days the price of BTC has increased significantly, well above the +8% occurred yesterday.
For example, a previous spike occurred on July 29th, 2019, when the price of bitcoin was about $9,600, right before it rose to $11,900 on August 6th, an increase of 24% in just over a week.
However, the historical peak of the Token Age Consumed metric calculated by Santiment occurred on November 29th, 2018, which is when the price plummeted – reaching a post-bubble low in December 2018.
As such, there is no obvious indication that a peak for the Token Age Consumed parameter could point to a price increase, but given that the past peaks that occurred at times when the price was not falling have often been followed by significant price rises, this is a scenario that may repeat itself these days.
